The coronavirus pandemic and the community shutdown that it has caused are expected to cost the city of Menlo Park an estimated $8.8 million in revenue, according to Assistant City Manager Nick Pegueros.
"The fiscal year is quickly coming to an end and our normal has been disrupted quite a bit," he said. "We have never experienced anything like this," he explained to the City Council during its virtual meeting on April 7.
The biggest hit, about $3.5 million, is expected to come from losses in hotel tax revenue in the third and fourth quarters of the fiscal year, which ends June 30.
Sales tax is expected to decline by $1 million, and revenue from charges for services is expected to drop $2.15 million for the city's community services department and $1.5 million for the city's community development department.
Fortunately, Pegueros said, the city expects about $5 million of that to be made up through vacancy savings and reductions to contract and professional services and a $1.5 million budget contingency amount. More importantly, the city has about $14 million set aside in an economic stabilization reserve to cover the estimated $3.8 million net loss.
As the city adapts to the new world imposed by a global pandemic, the Menlo Park City Council discussed many aspects of how the coronavirus is impacting city matters and took action on the following matters.
Members voted unanimously to:
● As soon as possible, consider a moratorium on commercial evictions for small businesses. San Mateo County passed one earlier that day that applies to unincorporated areas of San Mateo County only, offering protection to North Fair Oaks and West Menlo Park businesses on the Alameda de las Pulgas business strip. Such businesses may have gross receipts of no more than $2.5 million during the 2019 calendar year and are expected to pay back the full amount 90 days after the urgency ordinance ends and no longer than 180 days afterward. The council asked that the county's version of the emergency ordinance be drafted up to be applied to Menlo Park and brought back for approval the following week at the latest.
● Pass a resolution to affirm Menlo Park's commitment to "values of equity, fairness and justice." The National League of Cities' Race Equity and Leadership Council is encouraging cities to make such statements. Menlo Park announces a commitment to protect the city's most vulnerable residents, to consider racial equity and other inequities in the city's responses to the COVID-19 pandemic and ensure that the crisis does not exacerbate existing inequities. "This includes recognizing that risks and burdens are often borne disproportionately by communities of color and low-income people," the resolution states.
● In a couple of weeks, consider allowing construction to continue under limited circumstances. In some jurisdictions, construction on housing projects that have more than 10% of the housing set aside for below-market-rate residents is being permitted to move forward. Councilman Ray Mueller said he wanted to keep the ban in effect while there is a shortage of personal protective equipment, but is open to reconsidering it if the shortage ends. Governor Gavin Newsom announced yesterday that the state has made a deal to buy 200 million masks per month, and San Mateo County Manager Mike Callagy reported yesterday that the county has also ordered 6 million masks and other personal protective equipment.
In addition, the council has agreed to postpone its City Attorney recruitment efforts and plans to restart the search around mid-summer, following a closed session discussion.
About 95% of small businesses in Menlo Park reported a drop in revenue, cash flow due to an inability to operate, and made modifications to operations or reduced hours, said city analyst John Passmann.
The council discussed a range of programs being offered to small businesses and what they could do before coming to the agreement to consider the moratorium on evictions for small businesses. Federal, county and local funding sources are emerging to support small businesses.
SAMCEDA, the San Mateo County Economic Development Association, has assembled many resources for small businesses here. It has also proposed protocols for how to administer grants funded from the county's Measure K and community donors that it plans to bring before the Board of Supervisors next week for final approval. The idea is to have the program administered by the San Mateo Credit Union, which has branches in underserved areas of the county and the capacity to work with not just English-speakers, explained SAMCEDA president Rosanne Foust, to the Board of Supervisors. But those funds are likely still two weeks out or so from being available.
Kathleen Daly, who runs Cafe Zoe in Menlo Park, urged the council to think out of the box when it comes time to finally reopen businesses and restaurants. Perhaps, she suggested (via City Council candidate Jennifer Wolosin, due to technical issues) that parking areas could be roped off to allow people to maintain social distance outdoors when businesses reopen.
"We probably have a long road ahead of us and need to be very 'thinking-out-of-the-box' in what ways we can help small businesses survive," said Vice Mayor Drew Combs. "There's a long road ahead."
Communication and enforcement
When it comes to enforcing the shelter-at-home orders, the Menlo Park police department has adopted a policy of escalation, explained Police Chief Dave Bertini. The policy, adopted with guidance from the San Mateo County District Attorney's office, is focused on education the first and second times someone is caught in violation of the order. Records are kept to track encounters, and the third time someone violates the order, the warning is more severe and comes with a police report. The fourth time, the person in violation of the order may be arrested, Bertini said.
Currently, the police department receives roughly 30 to 40 calls per day about alleged violations of the shelter-at-home order; the most common complaints are about gardeners, construction or children gathering to play together.
Some construction is being permitted to continue in situations where a construction site poses a safety problem as-is, explained Interim Community Development Director Deanna Chow. Of about 35 requests for construction work to be allowed, less than a third were approved, and that work may only proceed "just to get them buttoned up and safe," she said.
Keeping people indoors may need more outreach and explanation, said Councilwoman Catherine Carlton. "We're not closing parks because we don't like parks," she said, referring to the city's recent decision to close Bedwell Bayfront Park, alongside mandates that put tennis and basketball courts, playgrounds and dog parks off limits for now.
"We want to save people's lives. This does get down to trying to save lives," she said.
In addition, Combs said he'd like to see a virtual town hall meeting for people to ask questions, and Taylor said she'd like to see a public service announcement put forward from the City Council and for a citywide mailer to be sent out with information in English and in Spanish.
"It's getting difficult to get people to want to stay in their homes," said Councilman Ray Mueller.
Since City Hall has been closed, department heads shared that they've been working hard to adapt to the city's new needs. The staff has realigned to operate as an emergency operations center, with City Manager Starla Jerome Robinson in charge and Deputy City Manager Justin Murphy as director.
Some staff members have pivoted to working in other roles for the time being; for instance, Sustainability Manager Rebecca Lucky is working in the role of school and nonprofit liaison. Protocols and documentation requirements have been laid out for what cities need to do to be eligible for reimbursement from the Federal Emergency Management Agency, or FEMA, should that become available, Murphy added.
The virtual emergency operations center is in frequent communication with county and Bay Area regional leaders, with twice-weekly countywide joint information calls and daily Bay Area joint information calls, he said.
Some infrastructure work is moving ahead – the construction of an emergency well at the city's corporation yard, and a project to replace the water main along Monte Rosa Drive in Sharon Heights, which has had a recent history of breaking, said Nikki Nagaya, public works director.
The city has also put together a virtual recreation center offering digital recreational resources for people of all ages to keep residents occupied during the shelter in place order.
The city's community services department is delivering meals to seniors previously served by the Menlo Park Senior Center's meal program and offering additional food supplies and weekly wellness checks in English and Spanish, according to department director Derek Schweigart.
In addition, the library continues to offer online and virtual services and is creating virtual story time and book discussion groups. There have been about 200 new library card applications submitted online in the past week, reported Library Director Sean Reinhart.